An annual general meeting (AGM) is a meeting conducted once a year in order for the company to conclude important matters of business as specified in the meeting's agenda. Many companies are required to conduct the meeting by law and their own charter or constitution. Details regarding the conduct of the meeting are typically specified in the company's bylaws.
The AGM's first agenda item typically requires the board of directors to report on the company's progress over the past year and its prospects for the future. Other standard agenda items involve a shareholder vote to approve the company's annual financial statements and annual report, to approve the final dividend recommended to shareholders by the board, and to elect new directors for any vacancies of the board that may have arisen since the last AGM. Documents regarding these items are distributed to shareholders in advance of the annual general meeting, together with its agenda.
The agenda may include any matter approved by the chairperson, including items requested in writing by individual shareholders. The main interaction at the meeting is between the board of directors and shareholders. Formally, the AGM is a forum at which the board of directors, amongst other things, seeks approval from shareholders for items specified in the agenda.
Attendance at the AGM is restricted to the board and shareholders, plus any other persons that may be invited to the meeting by the chairperson. Management attends the meeting only at the invitation of the chairperson, but selected members of the company's senior management are usually invited to attend. It is common for the company' president and chief financial officer to be invited to the meeting, as well as selected company advisors, investment analysts, and the financial press. The meeting is typically closed to the public.
The company's chairperson chairs the annual general meeting, with all other directors attending. The company secretary also attends the annual general meeting and takes written notes from which the main proceedings and decisions are recorded in the form of minutes. The minutes are subsequently distributed to shareholders for them to approve as the official record of the meeting.
An important part of the annual general meeting is the question time. This allows individual shareholders to question the board directly. Questions are directed to the chairperson, who in turn may call on others to answer.
The annual general meeting cannot proceed unless there is adequate shareholder representation as set by the requisite quorum defined in the company's charter. The quorum is usually specified as a minimum number of shareholders as well as a minimum level of shareholding to be represented at the meeting, either in person or by proxy.
